Apollo Lending REIT Closing Its Doors, Dissolving

The sale of a $9 billion loan portfolio at the start of the year proved to be a harbinger for Apollo Commercial Real Estate Finance.

The real estate investment trust and lending arm of Apollo Global Management is set to dissolve and liquidate its holdings, Bloomberg reported. Stuart Rothstein, the chief executive officer of the REIT, said in a statement that the move was “in the best interest of the company.”

The demise of the REIT comes after the business dumped nearly all of its loan commitments at the start of the year.

Apollo CREF agreed in January to offload the loan book to another Apollo subsidiary, Athene Holding. The sale price was equivalent to 99.7 percent of the value of the Apollo REIT’s loan commitments and represented a 23 percent premium on the company’s stock price.

The board was expected to explore strategic alternatives after the sale and even recommend the dissolution of the REIT if a fresh strategy didn’t emerge.

The sale, which closed in April, was expected to leave the business with only two loans on the books, totaling $146 million. The company had approximately $2.2 billion in assets after the sale, mostly in cash.

The business has been on the lender side of many notable deals in recent years. Michael Dell’s MSD Partners and Apollo Commercial Real Estate Finance provided a $536 million loan to Jeff Gural’s GFP Real Estate, Nathan Berman’s Metro Loft and Rockwood Capital for a 1,300-unit conversion of 25 Water Street in Manhattan.

Apollo was also involved with the trophy development at 111 West 57th Street on Billionaires’ Row, though it ultimately wrote off a junior mezzanine B loan, a decision that came with an $82 million hit for the REIT.

The shuttering of the REIT leaves insurance companies — such as Athene — as major capital providers to the industry.

— Holden Walter-Warner